3 Reasons Most People Never Make Money

in the Stock Market

5 Steps you MUST know before

spending another Rand

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Thank you for arriving early! The talk will begin shortly.

Thank you for arriving early! The talk will begin shortly.

3 Reasons Most People Never Make Money

in the Stock Market

5 Steps you MUST know before

spending another Rand

What’s the hardest part about making

money in the market?

95% fail

CORE

PROBLEMS

Problem

#1

Successful people concentrate on

doing their job well.

Successful traders DON’T treat

trading as a hobby.

Your Goal =

Make the Best Trades

• Don’t be concerned with the fruit of your

action

The fruit will come of its own accord.

Focus on the process

Problem

#2

Have you ever said: I know it’s down now, but it will come back.

It’s already down 20%, I might as well hold onto it

now.

I have a profit, but if I close now it will probably

keep going up.

I know I lost more than I thought, but if I close now

it will probably go up tomorrow.

The last time I sold a stock, it kept going up. So I’m

not selling this one yet.

Hope

Despair

Greed

Fear

Frustration

Problem

#3

Market Direction is 80% of the task

Take Personal Responsibility Step #1

Your Goal =

Make the Best Trades

• Success is actually a short race….a

sprint fueled by discipline just long

enough for the habit to kick in and take

over.

Trading Discipline

Remember: Bad things can happen

when you think of the money first.

Minimize Losses Step #2

• Never risk any more than 10% of

your account on any one trade.

• Limit your loss to no more than 1%

of the 10%.

Risk Management

Guidelines

Make a Plan &

WRITE IT DOWN &

Follow It!

Step #3

• When to Buy

• What to Buy

• When to Sell

Your plan should have

three components.

The faintest ink is better than

the best memory.

1. What criteria will I use to enter a trade?

2. How many stocks will I buy at once?

3. How much will I invest in each stock?

WHAT TO BUY

• VectorVest does this really well.

• I can search for Undervalued stocks that are growing

earnings aggressively and safely.

• I look for a RV> 1.25

• RS> 1.15

• GRT>15% and rising

• E.g. SASOL

What to BUY

Sasol

• What will trigger me to enter the market?

WHEN TO BUY

A Universal and Practical trading system

• The “Spring” system is my main method of short term swing

trading in the Forex and stock market.

• If followed diligently it produces many fine trades a month

• It can be traded with the trend and using shares with good

fundamentals as defined by VectorVest.

• I use it on H4 charts of the Dow Cash and Forex and on

daily charts of stocks.

• The method works well on m30 charts of the Dax.

A Universal and Practical trading system

• The system is simple and finds extremes in any market in any timeframe

• The system then looks for a reversal at this extreme which is confirmed by a reversal pattern defined by a candle or bar chart pattern.

• Invariably the reversal will be at a FIB level although NO knowledge of FIB patterns is required to make money with this system

• In many occasions the reversal will occur at a double bottom. This was referred to by MR Gann as “Lost Motion”

A Universal and Practical trading system

• An extreme is defined as a market that’s trading above or

below a 21 period high or low respectively.

• At the point a reversal pattern from a candle is used to

initiate a position.

The Spring Trade

A Universal and Practical trading system…The

Spring Trade

The Spring Trade

The Spring Trade

The Spring Trade

21 day Low trade

The Spring Trade

• The share pulls back to an old high

• The share is trading above the 89 day average

• The fundamentals are good

• The general market is rising

• The stochastic is less than 20

• The stochastic is showing reverse divergence with price.

AB=CD trade

Telkom

Sasol

Netcare

1. What will trigger me to exit the market? Am I

using leverage.

2. What will be my stop criteria? • Ex – 10% trailing stop

3. What is my profit target? What will I do when

my profit target is hit? • Ex – 30% gain, if hit I will sell half my positions and tighten stops to

10% below current price

WHEN TO SELL

Buy Safe, Undervalued Stocks

Rising in Price Step #4

“Good portfolio management starts

with buying the right stocks.”

- Dr. Bart A. DiLiddo Founder, VectorVest Inc.

1. Find the best stocks for your

portfolio

2. Manage them well

3. Use a watch list.

Keep this in mind

Stock price is steadily rising

& not volatile

Company is making money

and growing their earnings

Favor undervalued stocks

Before buying any stocks:

1 2

3

Rising Earnings

Drive Prices Higher

Favor Undervalued Companies

Value

Stock price is steadily rising

& not volatile

Company is making money

and growing their earnings

Favor undervalued stocks

Before buying any stocks:

Trade With The Market Step #5

Trade With The Market Step #5

Trade with the market

The shorts have been hammered

5 Steps To Success

1. Take Personal Responsibility

2. Establish Risk Management

3. Make A Plan, Write It Down & Follow It

4. Buy Safe, Undervalued Stocks Rising In

Price

5. Trade With The Market

The Choice

Do It Alone

Give us 60 Days…

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VectorVest to turn

your portfolio around… (Even if you never had success or limited experience in the market)

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